Trad­ing CVs

Spe­cial­is­ing in ve­hi­cle trans­ac­tions, Shri­ram Au­tomall In­dia Lim­ited is ex­pand­ing its op­er­a­tions on the back of good growth.

Commercial Vehicle - - WHAT'S INSIDE - Story & Pho­tos by: Ashish Bha­tia

Shri­ram Au­tomall In­dia Lim­ited (SAMIL), a 100 per cent sub­sidiary of Shri­ram Trans­port Fi­nance Com­pany (STFC), has turned six. Pro­vid­ing a plat­form to pur­chase and sale pre-owned ve­hi­cles, CVs and equip­ment, es­pe­cially through or­gan­ised and trans­par­ent bid­ding plat­forms, the com­pany is look­ing at ex­pand­ing its op­er­a­tions. Con­duct­ing ‘phys­i­cal’, ‘on­line’, ‘one-stop clas­si­fied’ and ‘pri­vate treaty’ trans­ac­tions to­wards the pur­chase and sell of pre-owned ve­hi­cles, the com­pany, to mark six years of its fruit­ful jour­ney held 60 bid­ding events si­mul­ta­ne­ously re­cently. The bid­ding events were held on one sin­gle day, and across all the cen­tres the com­pany has in the coun­try. In what could be termed as a dis­play of high level of syn­chro­ni­sa­tion, bid­ding events were si­mul­ta­ne­ously held at Shri­ram Au­tomall’s cen­tres in Andhra Pradesh, Tamil Nadu, Kar­nataka, Ma­ha­rash­tra, Mad­hya Pradesh, Ker­ala, Odisha, Haryana, Bi­har and Ut­tar Pradesh. Claimed SAMIL sources that over 5000 ve­hi­cles and equip­ment were auc­tioned on that day. These were val­ued at over Rs.100 crore. Auc­tions at SAMIL are a part of a sys­tem­atic process that calls for in­ter­ested peo­ple to reg­is­ter with them. Only those who have reg­is­tered are al­lowed to par­tic­i­pate. Com­mis­sion­ing the 66th mall at Agra to com­mem­o­rate six years of the suc­cess­ful jour­ney, SAMIL is work­ing to­wards ex­pand­ing its reach by in­tro­duc­ing a mo­bile app, ‘MySAMIL’. Mak­ing it to the ‘Limca Book of Records’ as the ‘largest plat­form for ac­qui­si­tion and dis­posal of pre-owned ve­hi­cles and equip­ment’, and for ‘con­duct­ing high­est num­ber of phys­i­cal bid­ding events in a sin­gle day’, SAMIL, ac­cord­ing to Sameer Mal­ho­tra, Chief Ex­ec­u­tive Of­fi­cer, Shri­ram Au­tomall, has in a short span of time be­come the most trusted brand for all lead­ing OEMs, banks, NBFCS, trans­porters, leas­ing and rental com­pa­nies, ve­hi­cle ag­gre­ga­tors, deal­ers, con­trac­tors and in­di­vid­u­als. It is a brand that they look up to, to dis­pose their pre-owned com­mer­cial ve­hi­cles, con­struc­tion equip­ment, farm equip­ment, pas­sen­ger ve­hi­cles, three-wheel­ers and even twowheel­ers.


A visit to SAMIL’s cen­tre at Pan­vel re­vealed that there were 155 ve­hi­cles listed for auc­tion. Over 152 bid­ders reg­is­tered for the

event. Over 80 ve­hi­cles went on the block, and were suc­cess­fully traded. The to­tal trans­ac­tion value ac­cord­ing to SAMIL sources was in ex­cess of Ru­pees-two crore. For all the cen­tres com­bined, SAMIL trans­acted ve­hi­cles and equip­ment worth Rs.50 crore in that day. A new high for a sin­gle day busi­ness trans­ac­tion ac­cord­ing to Mal­ho­tra. Brav­ing the harsh weather, and ris­ing tem­per­a­tures, in­di­cat­ing the on­set of sum­mer, Goldy of Ul­has­na­gar-based Shiv Shakti Trans­port, came to the event to buy a good used truck to add to his fleet of 12 trucks. Claim­ing to be a reg­u­lar vis­i­tor, Goldy said that the num­ber of CVs auc­tioned at the event, when­ever it was held, were good. While SAMIL sources claimed that the auc­tion is held twice ev­ery month, Goldy ex­pressed, “The maths be­hind an eight year old Tata truck would be an op­por­tu­nity to save to the tune of Rs.18 lakh on a truck.” This truck, at the pre­vi­ous event, did not sale, he men­tioned. If Goldy could have the truck for Ru­peessix lakhs, fi­nanced 100 per cent by STFC, against a price of Rs.24 lakh for a new truck, it would amount to a good deal of sav­ing. There would be lit­tle li­a­bil­ity in the short term. Draw­ing at­ten­tion to the lu­cra­tive na­ture of pre-owned ve­hi­cles, Goldy averred, “A price de­pre­ci­a­tion of Ru­pees-two lakh kicks in ev­ery year. A brand new truck thus amounts to a loss of Ru­pees-one lakh on its val­u­a­tion the mo­ment it is bought.” “In the case of this truck, I can in­vest in re­pairs to get to a good run­ning con­di­tion if the need be,” he added.

Milind Chauhan op­er­ates a tourist car com­pany called Amit Trav­els, and is based at Dahisar in Mum­bai. He came to the auc­tion to buy a tourist pas­sen­ger car with the in­ten­tion to earn a good profit by re­selling it to a ru­ral buyer in the short term. Chauhan kept a close eye on the con­di­tion of cars be­ing auc­tioned, aware of the fact that a worn out bat­tery or a need for ma­jor re­pair would lead to a big cut in his in­ten­tion of earn­ing a profit from a re­sale. Men­tioned Chauhan, that it is of­ten that the seller hasn’t done the manda­tory ‘fit­ness pass­ing’ of the ve­hi­cle, and would re­sult in an amount of ex­penses for the buyer. “If you are care­ful, and aware of what to look for, you could end up with a good deal.”

Bid­ding process

Of the four dis­tinct chan­nels used to bid at SAMIL – phys­i­cal bid­ding, on­line bid­ding, pri­vate treaty and through a one-stop clas­si­fied kiosk, it is the phys­i­cal bid­ding chan­nel that gar­ners 90 per cent of the busi­ness ac­cord­ing to Umesh Govind Re­vankar, Manag­ing Direc­tor & Chief Ex­ec­u­tive Of­fi­cer, STFC. “Over 90 per cent of the busi­ness

comes through the ‘phys­i­cal chan­nel’. The ‘kiosks’ haven’t added much to the vol­umes, and we are slowly look­ing to­wards tap­ping the mo­bile seg­ment, he averred. The mo­bile ap­pli­ca­tion is said to fa­cil­i­tate par­tic­i­pa­tion in live bid­ding events, sub­mis­sion of proxy bid for ve­hi­cles, dig­i­tal pay­ment op­tions, cus­tomer reg­is­tra­tion and up­load­ing of KYC doc­u­ments apart from no­ti­fy­ing the customers of the lat­est de­vel­op­ments in the com­pany. “In Clas­si­fieds, we haven’t really in­vested too much. It is a medium that needs sub­stan­tial in­vest­ment, both in terms of tech­nol­ogy, upgra­da­tion and up-keep,” he men­tioned. Re­vankar averred that his com­pany is look­ing at di­vert­ing its prof­its to­wards tech­nol­ogy ad­di­tion go­ing for­ward. In ‘pri­vate treaty’, SAMIL ne­go­ti­ates deals as a me­di­a­tor, be­tween the buyer and the seller. This chan­nel is ex­clu­sive to big ticket clients, and ac­counts for few se­lect trans­ac­tions for the com­pany. The ‘phys­i­cal’ bid­ding process high­lighted a medium that fa­cil­i­tates seam­less trans­ac­tions. Es­pe­cially when one con­sid­ers the value ad­di­tions like easy fi­nance, re­fur­bish­ment, val­u­a­tion, doc­u­men­ta­tion, and in­sur­ance.

Stat­ing that there is an ur­gency to re­place an ex­ist­ing ve­hi­cle with a more ef­fi­cient one as fuel prices are ris­ing, Re­vankar opined, “The need for ef­fi­cient ve­hi­cles is cre­at­ing a de­mand for used ve­hi­cle trans­ac­tions.” SAMIL, in the next fi­nan­cial year (FY201718) is look­ing at 30 per cent topline growth. In the long-term, the com­pany is look­ing at dou­bling the num­ber of cen­tres from the cur­rent 64 to over 150. To do so in a sus­tain­able man­ner, and with good rev­enue to sup­port healthy growth, the com­pany is look­ing at a fran­chise model.

1 ⇨ xx ⇧ 1. Tata 3116 se­ries goods car­rier trucks up for auc­tion. 2. Tata trac­tor trail­ers. 3. Tata 2518 tip­pers. 2 3

⇦ A Mahindra 575 DI trac­tor.

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